Must know: Difference between Investing and Trading

There is a huge difference between investing and trading. Investing entails building wealth gradually over an extended period of time through the buying and holding of stocks. Trading, on the other hand, involves more frequent buying and selling of stocks, with the goal of generating faster returns. When investing, the investment is often held for a period of time in contrast to trading, which is frequent and, many a times, multiple times during the day.

Impact: For small, retail investors, investing over a period of time is more suitable than trading, because trading involves a near constant monitoring of the stocks in which one is trading.